Bonds

Bonds Quote Forms

Bonds Information

What is bond insurance?

Bond insurance is an item that can be purchased by an issuer of a bond in order to guarantee scheduled payments of interest and principal on the bond to its bondholders in the event that the issuer defaults. If an issuer purchases bond insurance, the insurer's credit rating is used on the bond. Premiums for bond insurance can vary, as they're measured by the perceived risk of failure of the issuer. Premiums for bond insurance are paid to the insurer in either lump sums or installments.

What are the benefits of being bonded?

Issuers can use bond insurance to leverage business growth. Businesses — particularly those in the construction and financial industries — can also feel more secure about taking risks to grow and improve their business, as the bond is tied to the insurer's credit rating.

Credit professionals can provide unbiased criticism to bonded businesses. These businesses can also seek advice in underwriting projects.